Evidence of a Changing Farm Labor Supply (And a Preview of Future - - PowerPoint PPT Presentation

Evidence of a Changing Farm Labor Supply (And a Preview of Future Research)

Zach Rutledge

University of California, Davis

November 27th, 2018

Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 1 / 34

Outline

1 Media reports of farmworker shortages in California 2 Trends in California farm labor supply 3 2 studies documenting declines in the farm labor supply

Charlton and Taylor (2016)

A Declining Farm Workforce: Analysis of Panel Data from Rural Mexico

Fan et al. (2015)

Why Do Fewer Agricultural Workers Migrate Now?

4 My dissertation research with Ed Taylor and our upcoming survey of

California farmers

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2017 News Clip

https://www.youtube.com/watch?v=LtE6qW4ugho

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Media Coverage

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Media Interview Quotes

”The shortages never end, there just aren’t enough workers.”

• California farmer

“Every day in the summertime we have to leave some crops behind because there’s not enough labor to harvest it all.” - California farmer

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CA Farm Bureau Survey 2017

55% of respondents reported some type of labor shortage Of those who employ seasonal workers, 69% report shortages Some quotes “This year, workers were very scared to move around. The new political climate is creating high level concern in the workforce and definitely lower availability of workers in high traveled and public areas for those of us in more urbanized areas.” – San Diego County farmer “Workers are afraid of immigration enforcement and deportations, so they are heading back to their countries.” – Tulare County farmer

Source: California Farm Bureau Federation (2017) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 6 / 34

California Agricultural Production

California relies heavily on farm labor Largest agricultural producer in the US $50 billion in 2017 1/3 of US vegetables 2/3 of US fruits Fruits and vegetables require a lot of labor to produce and harvest

Source: California Department of Food and Agriculture (2018) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 7 / 34

Employment Statistics - QCEW/CES

Source: Quarterly Census of Employment and Wages and EDD Current Employment Statistics Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 8 / 34

Employment Statistics - EDD

Source: Martin et al. (2016); Khan, Martin, and Hardiman (2004) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 9 / 34

NAWS Statistics

Source: National Agricultural Workers Survey Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 10 / 34

NAWS Statistics

Source: National Agricultural Workers Survey Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 11 / 34

NAWS Statistics

Source: National Agricultural Workers Survey Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 12 / 34

NAWS Statistics

Source: National Agricultural Workers Survey Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 13 / 34

NAWS Statistics

Source: National Agricultural Workers Survey Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 14 / 34

Back-of-the-Envelope Calculations

If Social Security numbers are representative of the farm workforce... Combining number of workers and work days in 2001 and 2014

1,087,000 workers x 175 days = 190 million days of farm work 829,000 workers x 190 days = 158 millions days of farm work

18% decline in days of farm work A decrease in labor supply could lead to higher wages

Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 15 / 34

EDD Wage Statistics

Source: California Employment Development Department Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 16 / 34

Farm Labor - Some History

US farmers have relied on an abundant supply of workers coming from rural Mexico since the Bracero Program (1942-1964) Lots of workers have kept wages low California farmers have become reliant upon this cheap source of labor But things are slowly changing...

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The Transition out of Farm Work (1990-2010)

• 1. Economies develop
• 2. Workers move out of farm work, and nations start to import

farmworkers

Source: Taylor and Charlton (2018) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 18 / 34

The Transition out of Farm Work (1990 - 2010)

• 1. Mexico is developing
• 2. Starting to import workers from Central America

Source: Taylor, Charlton, and Yunez-Naude (2012) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 19 / 34

Charlton and Taylor (2016) A Declining Farm Workforce: Analysis of Panel Data from Rural Mexico

Use rural household survey data from Mexico (ENHRUM) Panel of data on everyone in household between 1980 and 2011 Identifies whether or not each individual worked on a farm in each year They find that rural Mexicans are increasingly less likely to work in agriculture They identify some factors contributing to this and how they are likely to affect the farm labor supply

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Rural Mexicans Performing Less Farmwork

Mexican Rural Household Data (ENHRUM)

Source: Charlton and Taylor (2016) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 21 / 34

Evidence-What is Causing the Decline in Farm Workforce?

Source: Charlton and Taylor (2016) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 22 / 34

What is driving the decline?

Expanding economy in Mexico Increased demand for nonfarm labor in Mexico (service/industrial) Higher educational attainment Decreasing birthrates among rural Mexicans (down from 6 to 2) Rising value of Mexican Peso (lowers the value of migrating)

Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 23 / 34

Fan et al. (2015) Why Do Fewer Agricultural Workers Migrate Now?

Use NAWS data (National Agricultural Workers Survey) Identify a negative trend in farmworker migration

Follow-the-Crop Migrants = work on 2 different farms that are at least 75 miles apart Shuttle Migrants = Travel from home (either in Mexico or in the US) to a US farm at least 75 miles away from their home

Identify that farmworkers are increasingly less likely to migrate to US farms Identify some factors that are contributing to the negative trend in migration

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Reduced Farmworker Migration

Probability of Migrating to a US Farm

Source: Fan et al. (2015) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 25 / 34

Reduced Farmworker Migration

Source: Fan et al. (2015) Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 26 / 34

What is Causing the Decline?

Structural changes in the US economy and political environment Changes in farmworker demographics are playing an increasing role Immgration reform and increased border enforcement = ⇒ Fewer young, single workers migrating to the US = ⇒ Older, more settled workforce More farmworkers having US children

Zach Rutledge (U.C. Davis) Farm Labor Supply November 27th, 2018 27 / 34

Quick Summary

Mexico is developing

Expanding nonfarm economy Higher educational attainment Lower birthrates

= ⇒ Decreased probability that rural Mexicans work on a farm Changing demographic composition of the farm workforce = ⇒ Fewer farmworkers migrating to US farms There is some evidence of a changing farm labor supply Farmers will eventually have to adapt to this

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What’s Next?

Dissertation work with Ed Taylor 2 chapters left to write

1 How are

Reductions in the farm labor supply Increased labor costs

affecting agricultural production and farmer profits in California

2 To what extent are US non-farm sectors pulling workers away from

agricultural work

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Survey of California Farmers

Working with Bryan Little and Sara Neagu-Reed (California Farm Bureau Federation) Online survey Questions will ask about

Labor Shortages H-2A employment Farm labor contractor use Changes in crops grown Recent use of labor-saving technologies Changes in cultivation practices

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Upcoming Survey of California Farmers

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Chapter 1 - Research Goals

Look at statistical relationship between labor shortages and the various farming practices Quantify how much labor shortages and higher wages are driving changes in farming practices Identify what is the dominant response mechanism among farmers Quantify how much decreases in labor supply affect farmer profits No results yet

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Chapter 2 Research Preview

How much are other US sectors pulling workers out of the farm labor force?

(1) (2) (log) Crop Employment (log) Farm Employment (log) Permits

• 0.0893**
• 0.107***

(0.0376) (0.0359) N 861 1357 County Fixed Effects Yes Yes Year Fixed Effects Yes Yes Standard errors in parentheses are clustered at the county level * p < .1, ** p < .05, *** p < .01

Preliminary Findings: A 10% increase in construction leads to a 1% decline in farm labor supply

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Thank You!

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